Departments stores in crisis?

retailpilot_empty_department_store Empty department store. Photo: Artem Beliaikin.

Besides internal structural challenges, it seems bad headlines for German department stores do not stop, as a new press release of Germany’s Federal Statistics Office reports:

  • German department stores recorded decrease of 42.1% in turnover from 1999 to 2019 while online trade turnover doubled (+120.3%)
  • Brick-and-mortar retail of clothing and textiles experienced a decline in turnover due to corona crisis: -11.6% in August 2020 versus February 2020
  • Highest increase of online purchases is happening in categories food, cosmetics and drugstore items
  • Nearly one fifth (17%) of small retail businesses did not sell their products via their own website in 2019

While the dynamic online and mail order business recorded additional increases in turnover due to corona crisis, the pandemic further aggravated the economic situation of traditional department stores. Based on provisional figures, the Federal Statistical Office reports that department stores’ turnover in real terms was down by 2.4% in August 2020 year on year. From April to June 2020, turnover in real terms fell by 21.3% compared to the 2nd quarter of 2019. In August 2020, the department stores’ calendar and seasonal adjusted turnover did still not reach pre-crisis level (-1.2% versus February 2020). Department stores are closing down in many places which further diminishes the attractiveness of inner cities and pedestrian zones.

Source: Federal German Statistics Office, press release no. N 063, October 5th, 2020
Photo: Pexels, Artem Beliaikin